U.S. throws GM £2.75bn rescue lifeline

The U.S. government has stumped up the first £2.75bn in rescue loans to support Vauxhall owner General Motors, but it is still in discussions with Chrysler about a similar injection of emergency funds.

Help given: General Motors has now received a rescue lifeline from the U.S. government

Chrysler, which owns the Jeep and Dodge marques, said it remained in talks with the US Treasury to thrash out its own £2.75bn cash lifeline.

GM, which has 5,000 workers in the UK, warned that its cash would fall below the £7.6bn it needs on hand to stay afloat unless the government acted quickly.

The 'Detroit three' - GM, Chrysler, and Ford - are fighting for survival after being pushed to the brink by a global slump in car sales. GM and Chrysler won vital support when president George W Bush approved a £12bn bailout for them last month.

While Ford is also struggling, it has no immediate need for financial assistance.